Most people believe estate planning mainly focuses on what happens after they pass away. Their will instructs what happens to their assets, who should benefit from the estate and how an estate is settled. However, people have the option to decide in their will what happens to them if they are still alive but suffering from an illness or injury.
A power of attorney is a legal representative who acts on behalf of the testator. Typically, a power of attorney can only act if the testator is suffering from an injury or illness that prevents them from caring for themselves. Here is what they can do:
Medical, financial and general power of attorney
A power of attorney may have medical or financial authority of an incapacitated testator. If a power of attorney has medical authority, they may decide on a testator’s long-term care needs, such as surgery, medication, therapy and end-of-life care.
A financial power of attorney can help manage a testator’s finances on their behalf. This often includes managing monthly expenses, such as debts, rent or mortgage bills, utility bills and the ability to access bank accounts, withdraw money and sign checks.
Some people will assign one person as a general power of attorney who can manage all financial and medical decisions. A general power of attorney is often given to someone very close to the testator who has their best interests at heart, such as a spouse, child or sibling.
A power of attorney may be considered “springing.” A springing power of attorney is dormant until they are needed, such as after a testator has had a life-threatening injury. However, a power of attorney could also be “limited” or “durable,” which can give them some control over financial or health matters for specific reasons at specific times outlined in an agreement.
